Mortgage calculator
Calculating your maximum mortgage is an essential step in the home-buying process. Understanding how much you can borrow will help you set realistic expectations and avoid disappointment later on. On this page, ‘we’llwe will walk you through the key factors that influence your borrowing capacity, including your income, your debts, the interest rates, and the loan-to-value ratio. To make this process easier, we provide an online tool that lets you quickly calculate your maximum mortgage.
We always strive for the best-fitting offer
We compare for you with over 40+ lenders, always independent!
Always reliable, your personal advisor
For all your questions, you have contact with one advisor, whom you can rely on!
Your first consultation is always free and without obligation
Schedule an introductory meeting this week, even in the evenings!
Understanding the Dutch mortgage system
Before diving into the specifics of calculating your maximum mortgage, it’s important to understand the fundamentals of the Dutch mortgage system. In the Netherlands, mortgages are referred to as ‘hypotheek’, and they are typically offered with terms of up to 30 years. The most common types of mortgages include:
Annuity mortgage: An annuity mortgage involves fixed monthly payments that remain constant throughout the loan term. These payments cover both the interest and the repayment of the loan amount. In the early years, a larger portion of the payment goes towards interest, while in the later years, a larger portion goes towards repaying the loan.
Lineair mortgage: In a linear mortgage, the repayment amount is fixed and remains constant throughout the loan term. This means that each month, the borrower repays the same amount of the loan, while the interest decreases over time. As a result, the monthly payments start relatively high but gradually decrease.
Each mortgage type has its own advantages and disadvantages, which should be considered based on your financial situation and long-term goals.
- We always strive for the best-fitting offer
- Always reliable, your personal advisor
Income
Your income is one of the most significant factors in determining how much you can borrow. Lenders typically look at your gross annual income, which includes your salary, bonuses, and any other regular income streams. They use this figure to calculate your debt-to-income ratio. Generally, lenders prefer that your total monthly debt payments, including your mortgage, do not exceed 36% of your gross monthly income.
In addition to your current income, lenders also consider the stability and history of your earnings. A steady job with a reliable income stream is more favorable than a variable income, such as freelance or commission-based work. If you are self-employed, you need to provide additional documentation, such as tax returns and financial statements, to prove your income stability.
Debts
Existing debts also play a significant role in determining your maximum mortgage amount. Lenders will assess your current liabilities, including student loans, car loans, credit card debts, and other personal loans. They calculate your debt-to-income ratio by adding up all your monthly debt payments and dividing them by your gross monthly income. A high debt-to-income ratio indicates higher financial risk, which might reduce the amount you can borrow for a mortgage.
To improve your borrowing capacity, it is advisable to pay down existing debts before applying for a mortgage. Reducing your outstanding balances can lower your debt-to-income ratio, making you a more attractive candidate to lenders.
Interest rates
Interest rates are a critical component of any mortgage, as they determine the cost of borrowing money. In the Netherlands, interest rates can be either fixed or variable, and each type has its own implications for your mortgage.
With a fixed interest rate, your mortgage payments remain consistent throughout the agreed term. This stability is beneficial for long-term budgeting, as it protects you from market fluctuations. Fixed-rate periods can range from 1 to 30 years. While longer fixed-rate periods provide more stability, they often come with slightly higher interest rates compared to shorter periods.
Variable rates can change periodically based on market conditions. These rates may initially be lower than fixed rates, making them attractive for some borrowers. However, they carry the risk of increasing over time, which can lead to higher monthly payments. Variable rates can be advantageous if you expect interest rates to remain low or decrease, but they require a higher tolerance for financial risk.
Loan-to-Value Ratio (LTV)
The Loan-to-Value (LTV) ratio represents the maximum percentage of a property's value that can be borrowed through a mortgage. In the Netherlands, the maximum LTV ratio is typically 100%, meaning you can finance the entire value of the property through a mortgage. However, additional costs such as notary fees, taxes, and potential renovations will need to be covered by your own funds.